Index gains on back of strong regional markets

Share prices closed 0.52 percent higher yesterday tracking a rebound in Asian markets after heavy losses Thursday driven by concerns over the fast growing Chinese economy, dealers said.

The Philippine Stock Exchange composite index rose 16.70 points to 3,254.76. It moved between 3,235.69 and 3,267.27. The broader all-share index rose 9.85 points to 2,072.28.

There were 74 gainers and 34 losers with 65 stocks unchanged. Turnover totalled 2.18 billion shares worth P2.24 billion.

"Stocks rebounded after yesterday’s panic selling but investors realised the selling was overdone," said Rommel Macapagal of Westlink Global Equities.

Macapagal noted light trading volumes suggested investors were generally cautious, especially after the central bank’s announcement late Thursday to keep interest rates on hold and new measures to siphon off excess liquidity.

"Some of those excess funds (of banks) had found their way into the stock market in recent weeks. The central bank’s move could thus eventually weigh on the market," he said.

The central bank is to introduce new measures to avoid a possible buildup in inflationary pressures amid rapid growth in domestic liquidity.

The new measures, which will take effect from May 10, include luring funds of the state pension funds and other government owned and controlled corporations away from banks.

The day’s winners include top-traded Philippine Long Distance Telephone Co. (PLDT) which rose P15 to P2,515.

Bank of the Philippine Islands jumped P2 to P66 while food and beverage firm San Miguel Corp.’s A and B-shares were unchanged at P65 and P73.50, respectively.

ABS-CBN Broadcasting Corp. jumped to its highest close in more than three years after Deutsche Bank AG raised its rating to ‘buy’ from ‘hold.’

The central bank’s decision to accept more money into its higher yielding accounts will not make equities less attractive, according to some fund managers.

"Those invested in fixed-income assets will have other options," said Marvin Fausto, who helps manage $3.5 billion in assets at Equitable PCI Bank. "I don’t think it will lure away funds from equities. The impact on equities will be minimal."— AFP